We could cite other Washington policies, including the political agitation for “mark-to-market” accounting that has forced firms to record losses after ratings downgrades even if the assets haven’t been sold. But these are some of the main lowlights.

Our point here isn’t to absolve Wall Street or pretend there weren’t private excesses. But the investment mistakes would surely have been less extreme, and ultimately their damage more containable, if not for the enormous political support and subsidy for mortgage credit. Beware politicians who peddle fables that cast themselves as the heroes.

Which is a point I’ve tried to make several times… Yes greed and mismanagement played a part but they didn’t create the problem. The roots of our credit crisis lie in bad or short sighted government policy. It isn’t lack of government regulation that got us here it was bad regulation.